A Medical Device Daily

Volcano (Rancho Cordova, California) reported the pricing of its public offering of 7 million shares of its common stock at $16.25 a share, thus raising gross of $113.75 million, or net, $107.2 million.

All of the shares are being offered by Volcano. The company has granted the underwriters a 30-day option to buy another 1.05 million shares to cover over-allotments. The offering is expected to close Oct. 23.

Earlier this month Volcano said it intended to sell 6 million shares and that it could raise up to $118.54 million from the offering before expenses (Medical Device Daily, Oct. 10, 2007).

Volcano has about 38.7 million shares outstanding, according to its most recent quarterly report, filed in August.

Volcano is a developer of devices designed to facilitate endovascular procedures and enhance the diagnosis of and guide therapies for vascular and structural heart diseases.

J.P. Morgan Securities, Banc of America Securities and Piper Jaffray are acting as joint book-running managers for the offering, with Bear Stearns acting as co-manager.

In other financing news: Covidien (Pembroke, Bermuda) reported that its subsidiary, Covidian International Finance (CIFSA), has priced an offering of $2.75 billion aggregate principal amount of fixed-rate senior notes to qualified institutional buyers.

According to a report from Rick Wise, med-tech analyst for Bear Sterns, the new notes will replace about 85% of Covidien’s roughly $3.2 billion in borrowings under its temporary bridge loan facility. It also represents more than about 60% of the company’s $4.4 billion total debt load as of the end of F3Q07.

According to Covidien, the $250 million notes, due 2010, will be issued at a price of 99.892%, plus accrued interest, and will bear interest at a rate of 5.15% a year, payable semi-annually; the $500 million notes due 2012 will be issued at a price of 99.864%, plus accrued interest, and will bear interest at a rate of 5.45% a year, payable semi-annually; the $1.15 billion notes due 2017 will be issued at a price of 99.927%, plus accrued interest, and will bear interest at a rate of 6% a year, payable semi-annually; and the $850 million notes due 2037 will be issued at a price of 99.560%, plus accrued interest, and will bear interest at a rate of 6.55% a year, payable semi-annually.

The transaction is expected to close Monday.

“There could be a modest upside to our FY08 and FY09 EPS — if the final cost of the debt is lower vs. our projections and/or Covidien chooses to repay a portion of its $4.4 billion initial total debt load outright,” Wise wrote in his report. “Such actions would lower Covidien’s interest expense and potentially increase earnings sooner than we have projected. But lacking further clarity on these issues and many other moving pieces — including operational change and the potential for acquisitions — we maintain our $2.50 FY08 and $2.83 FY09 estimates at this time.”

Wise in his report said that recent news from the company has been in line with management commentary and Bear Sterns’ expectations.

He added that with increased focus, investment and the right mix of restructuring and transformational activities, “we believe Covidien could become a faster growing, more nimble med-tech competitor several years post-spin.”